Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
In 2004 Bob Jones was appointed CEO of Old National Bancorp (NASDAQ:ONB). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Bob Jones’s Compensation Compare With Similar Sized Companies?
According to our data, Old National Bancorp has a market capitalization of US$3.0b, and pays its CEO total annual compensation worth US$2.6m. (This number is for the twelve months until 2017). While we always look at total compensation first, we note that the salary component is less, at US$694k. When we examined a selection of companies with market caps ranging from US$2.0b to US$6.4b, we found the median CEO compensation was US$4.8m.
Most shareholders would consider it a positive that Bob Jones takes less compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it’s important we delve into the performance of the actual business.
You can see a visual representation of the CEO compensation at Old National Bancorp, below.
Is Old National Bancorp Growing?
Over the last three years Old National Bancorp has shrunk its earnings per share by an average of 6.9% per year (measured with a line of best fit). In the last year, its revenue is up 16%.
Unfortunately, earnings per share have trended lower over the last three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has Old National Bancorp Been A Good Investment?
I think that the total shareholder return of 68%, over three years, would leave most Old National Bancorp shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
It appears that Old National Bancorp remunerates its CEO below most similar sized companies.
It’s well worth noting that while Bob Jones is paid less than most company leaders (at similar sized companies), there isn’t much EPS growth. Having said that, returns to shareholders have been great. We would like to see EPS growth, but in our view it seems the CEO is remunerated reasonably. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Old National Bancorp (free visualization of insider trades).
If you want to buy a stock that is better than Old National Bancorp, this free list of high return, low debt companies is a great place to look.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.